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SB-1131 Electrical and gas corporations: energy efficiency: financing options: industrial and agricultural processes: custom projects.(2017-2018)

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Date Published: 07/03/2018 09:00 PM
SB1131:v95#DOCUMENT

Amended  IN  Assembly  July 03, 2018
Amended  IN  Assembly  June 13, 2018
Amended  IN  Senate  May 25, 2018
Amended  IN  Senate  May 01, 2018

CALIFORNIA LEGISLATURE— 2017–2018 REGULAR SESSION

Senate Bill No. 1131


Introduced by Senator Hertzberg
(Coauthors: Senators Dodd and Wiener)

February 13, 2018


An act to amend Section 381.2 of the Public Utilities Code, relating to energy.


LEGISLATIVE COUNSEL'S DIGEST


SB 1131, as amended, Hertzberg. Electrical and gas corporations: energy efficiency: financing options: industrial and agricultural processes: custom projects.
Under existing law, the Public Utilities Commission (PUC) has regulatory authority over public utilities, including electrical corporations and gas corporations. Existing law requires the State Energy Resources Conservation and Development Commission (Energy Commission), by March 1, 2010, to establish a regulatory proceeding to develop and implement a comprehensive program to achieve greater energy savings in California’s existing residential and nonresidential building stock. Existing law requires the PUC to investigate the ability of electrical corporations and gas corporations to provide various energy efficiency financing options to their customers for the purposes of implementing the program developed by the Energy Commission. Existing law requires the PUC, by September 1, 2016, to authorize electrical corporations and gas corporations to provide incentives, rebates, technical assistance, and support to their customers to increase the energy efficiency of existing buildings, as specified, and to authorize electrical corporations and gas corporations to recover the reasonable costs of those programs in rates. Existing law requires the PUC to authorize electrical corporations and gas corporations to count all energy savings achieved through the authorized programs, unless determined otherwise, toward overall energy efficiency goals or targets established by the PUC and authorizes the PUC to adjust the energy efficiency goals or targets of electrical corporations and gas corporations to reflect the estimated change in energy savings resulting from those programs.
This bill would delete the language explicitly authorizing recovery in rates for the costs of those programs. Commencing July 1, 2019, this bill would require the PUC to authorize electrical corporations and gas corporations to provide incentives, rebates, technical assistance, and support to their customers to increase energy efficiency, pursuant to separate procedures applicable only to custom projects and other custom programs for industrial, agricultural, commercial, residential, and public sector customers. The bill would require the PUC to develop and maintain eligibility criteria or other metrics for determining whether a project is eligible for funding pursuant to the program, and sets forth procedural requirements for the adoption and revision of the criteria or metrics. The bill would require that the criteria or metrics operate prospectively. The bill would require each electrical corporation and gas corporation to maintain a customer measure project archive and would require the PUC to develop and maintain requirements for what information is to be included in the archive, including information relative to preapplication-stage and application-stage customer energy efficiency projects. Upon being notified of the filing of a new application, or that a proposed project has moved from the preapplication stage to the application stage, the bill would require the PUC to make a determination of whether the application has been selected for review within 30 days and to notify the electrical corporation or gas corporation of its decision. The bill would require that the preinstallation review of a proposed project be concluded within 30 days from when the project is selected for review. If, as a result of the review, the PUC rejects the proposed project or requests modification of the project, the bill would require the PUC to notify the electrical corporation or gas corporation and the project applicant of the reasons for the rejection or request for modification, including each basis as to why the project is inconsistent with the eligibility criteria or metrics, and would require the PUC to make specific recommendations for the conditions under which the project would be approved. The bill would provide that for projects that were not reviewed, were approved following review, or that were operationally approved, as specified, an electrical corporation or gas corporation may rely on the forecast energy savings values submitted or approved for the project when entering into estimated incentive agreements for the project and in any subsequent energy savings claims before the PUC. The bill would authorize the PUC to employ post-installation review of a project to determine if the project was carried out consistent with the application and to obtain information pertaining to whether the eligibility criteria or metrics should be revised.
Under existing law, a violation of the Public Utilities Act or any order, decision, rule, direction, demand, or requirement of the PUC is a crime.
Because the provisions of this bill are within the act and require action by the PUC to implement its requirements, a violation of these provisions would impose a state-mandated local program by creating a new crime.
The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.
This bill would provide that no reimbursement is required by this act for a specified reason.
Vote: MAJORITY   Appropriation: NO   Fiscal Committee: YES   Local Program: YES  

The people of the State of California do enact as follows:


SECTION 1.

 Section 381.2 of the Public Utilities Code is amended to read:

381.2.
 (a) (1) The commission shall investigate the ability of electrical corporations and gas corporations to provide various energy efficiency financing options to their customers for the purposes of implementing the program developed pursuant to Section 25943 of the Public Resources Code.
(2) It is the intent of the Legislature that the commission implement this section by establishing applicable rules, within a reasonable period of time and in an open process, that are clear and operate on a prospective basis.
(b) Recognizing the already underway 2015 commission work to adopt efficiency potential and goals, the Energy Commission work on its 2015 energy demand forecast, and the need to determine how to incorporate meter-based performance into determinations of goals, portfolio cost-effectiveness, and authorized budgets, the commission, in a separate or existing proceeding, shall, by September 1, 2016, authorize electrical corporations or gas corporations to provide financial incentives, rebates, technical assistance, and support to their customers to increase the energy efficiency of existing buildings based on all estimated energy savings and energy usage reductions, taking into consideration the overall reduction in normalized metered energy consumption as a measure of energy savings. Those programs shall include energy usage reductions resulting from the adoption of a measure or installation of equipment required for modifications to existing buildings to bring them into conformity with, or exceed, the requirements of Title 24 of the California Code of Regulations, as well as operational, behavioral, and retrocommissioning activities reasonably expected to produce multiyear savings. Electrical corporations and gas corporations shall be permitted to recover in rates the reasonable costs of these programs. The commission shall authorize an electrical corporation and gas corporation to count all energy savings achieved through the authorized programs created by this subdivision, unless determined otherwise, toward overall energy efficiency goals or targets established by the commission. The commission may adjust the energy efficiency goals or targets of an electrical corporation and gas corporation to reflect this change in savings estimation consistent with this subdivision and subdivision (d).
(c) Effective January 1, 2016, electrical corporations and gas corporations are authorized to implement the provisions of subdivision (b) for high opportunity projects or programs. The commission shall provide expedited authorization of high opportunity projects and programs to apply the savings baseline provisions in subdivision (b).
(d) In furtherance of subdivision (b), the commission, in consultation with the Energy Commission, shall consider all of the following:
(1) The results of any interagency baseline assessment.
(2) Any available results from electrical corporation and gas corporation baseline pilot studies ordered in commission Decision 14-10-046 (October 24, 2014).
(3) Information necessary to ensure consistency with the energy forecast and planning functions of the Energy Commission and the Independent System Operator.
(e) The commission may direct electrical corporations and gas corporations to make filings that are necessary to ensure coordination with the energy forecast and planning functions of the Energy Commission and the Independent System Operator.
(f) The commission shall prioritize energy efficiency activities consistent with Sections 454.55 and 454.56.
(g) (1) This subdivision shall impose the operative requirements pursuant to this section for custom projects and other custom programs for industrial, agricultural, commercial, residential, and public sector customers. This subdivision shall become operative on July 1, 2019, and shall apply only to those programs and projects.
(A) The commission shall authorize electrical corporations and gas corporations to provide financial incentives, rebates, technical assistance, and support to their customers to increase the energy efficiency of industrial, agricultural, commercial, residential, and public sector customers based on reductions in normalized metered energy consumption as described in subdivision (b).

(B)Electrical corporations and gas corporations shall be permitted to recover in rates the reasonable costs of these programs.

(C)

(B) All energy savings achieved through the programs authorized pursuant to this subdivision shall count toward the overall energy efficiency goals or targets established by the commission for an electrical corporation, gas corporation, or program administrator.

(D)

(C) The commission may adjust the energy efficiency goals or targets of an electrical corporation or gas corporation to reflect a change in the forecast energy savings consistent with this subdivision and subdivision (d).
(2) The commission shall adopt rules for custom energy efficiency projects and other energy efficiency programs for industrial, agricultural, commercial, residential, and public sector customers. The rules shall require the commission to develop and maintain eligibility criteria or other metrics for determining whether a project is eligible for funding pursuant to the program.
(A) Initial proposed eligibility criteria or metrics shall be circulated for public review and comment no fewer than 30 days and not more than 60 days prior to changes, including posting on the commission’s Internet Web site.
(B) After the initial 30- to 60-day period for public review and comment, any changes to the initial proposed eligibility criteria or metrics shall be circulated for public review for not less than 30 days prior to final adoption.
(C) Once eligibility criteria or metrics are adopted, any proposed revision shall be circulated for public review and comment for not less than 30 days prior to a revision. For these purposes, grammatical corrections or other nonsubstantive modifications are not a revision and may be made when the need for the correction or modification is discovered.
(D) Eligibility criteria or metrics shall operate only on a prospective basis, and shall not be applied retroactively to any pending or approved applications.
(E) Any delay in the adoption of eligibility criteria or metrics past July 1, 2019, shall not be the basis for denial of any application nor a basis to suspend the program.
(3) (A) The rules adopted by the commission for custom energy efficiency projects and other energy efficiency programs for industrial, agricultural, commercial, residential, and public sector customers shall require each electrical corporation and gas corporation to maintain a customer measure project archive. The rules shall require the commission to develop and maintain requirements for what information is to be included in the custom measure project archive, including information relative to preapplication-stage and application-stage customer energy efficiency projects.
(B) Upon being notified of the filing of a new application, or that a proposed project has moved from the preapplication stage to the application stage, the commission shall make a determination of whether the application has been selected for review within 30 days and notify the electrical corporation or gas corporation of its decision to review. The commission shall develop and maintain requirements for what information is to be included in the customer measure project archive for those customer projects selected for review. The commission shall, within 30 days of the submission of a project to the custom measures project archive, promptly notify an electrical corporation or gas corporation of any deficiency in the information supporting an application.
(C) The commission shall notify the electrical corporation or gas corporation of the specific deficiencies in the information supporting an application, including each basis as to why the project is inconsistent with the eligibility criteria and metrics, and make specific recommendations for the conditions under which the project would be approved. If the commission is unable to identify specific deficiencies, the application shall be deemed complete and sufficiently supported for review.
(D) The preinstallation review of a proposed project shall be concluded within 30 days from when the project is selected for review.
(E) If, as a result of the review, the commission rejects the proposed project or requests modification of the project, the commission shall notify the electrical corporation or gas corporation and the project applicant of the reasons for the rejection or request for modification, including each basis as to why the project is inconsistent with the eligibility criteria and metrics, and make specific recommendations for the conditions under which the project would be approved.
(F) The commission shall not reject a proposed project or request modification of a project on the basis of inconsistency with eligibility criteria or metrics that were not in effect at the time the project application was submitted.
(G) If parties to the project are unsatisfied with the commission’s directions for the project, a dispute resolution process may be initiated by an electrical corporation, gas corporation, or project applicant. The commission shall adopt rules for the conduct of the dispute resolution process.
(H) If a project is not selected for review within the period determined pursuant of subparagraph (B), or if a project has not received written direction from the commission within the period specified in subparagraph (D), the project may proceed as if it had been approved by the commission.
(4) (A) For projects that were not reviewed, were approved following review, or that were operationally approved pursuant to subparagraph (H) of paragraph (3), an electrical corporation or gas corporation may rely on the forecast energy savings values submitted or approved for the project when entering into estimated incentive agreements for the project and in any subsequent energy savings claims before the commission.
(B) The commission may employ postinstallation review of a project to determine if the project was carried out consistent with the application and to obtain information pertaining to whether the eligibility criteria or metrics should be revised.
(5) Except as described in paragraph (2), nothing in this subdivision limits the commission’s existing authority to evaluate projects or programs for the purpose of prospectively adjusting the projects or programs for industrial and agricultural processes, facilities, systems, and equipment.

SEC. 2.

 No reimbursement is required by this act pursuant to Section 6 of Article XIII B of the California Constitution because the only costs that may be incurred by a local agency or school district will be incurred because this act creates a new crime or infraction, eliminates a crime or infraction, or changes the penalty for a crime or infraction, within the meaning of Section 17556 of the Government Code, or changes the definition of a crime within the meaning of Section 6 of Article XIII B of the California Constitution.